Dubai prime residential market in demand
Dubai, September 25, 2013
The prime residential market in Dubai has registered strong growth in 2013 with the rents up 15 per cent year-on-year to June 2013 as an increasing number of corporate tenants entered the markets, said a report.
The sector witnessed a 21.4 per cent year-on-year increase from June last year thanks to the backing from investors in Mena and Asia region looking to place wealth in a safe-haven environment, according to a report by property expert Knight Frank.
The prime residential prices have risen since the beginning of 2012, the report stated. This year, the Dubai market has witnessed a spurt in transactional volumes along with prices.
The proposed mortgage cap announced in December last year has caused a flurry of activity amongst owner-occupiers, keen to purchase their homes in Dubai before legislation is enforced, the report added.
"Rapidly-expanding finance, tourism and logistics sectors are fuelling growth in Dubai's tightly regulated property sector, remarked Helen Tatham, the director of Residential, Knight Frank Dubai.
In the last 12 months the government and the private developers have implemented cooling measures to reduce the likelihood of another housing bubble, she stated.
Tatham pointed out that Dubai continued to attract a mixture of foreign buyers mainly from the MIddle East, Europe, Asia and Africa, who regard it as the city of their choice mainly for the lifestyle, investment and political stability.
"In 2013 the luxury price of luxury villas increased by 11.4 per cent, while prime apartments have risen 15.1 per cent in value," she added.
According to Knight Frank, the price of luxury villas picked up post January 2012, whilst the price of top-end apartments gained momentum from September 2012 onwards.
The prime rents increased by 15 per cent in the year to June 2013 fuelled by an increasing expatriate population in the emirate, but the government imposed restrictions on landlords raising rents of their exixting tenants has controlled this more than might have been the case otherwise, said the expert.
Recognising the growing demand, investors are seeking out good rental investments where typically they can expect 4 to 6 per cent net yields, said Knight Frank in its report.-TradeArabia News Service